Current national electricity rules limit the ability of the Australian Energy Regulator (AER) to determine efficient energy costs and therefore put upward pressure on energy prices, according to AER Chairman Andrew Reeves.

Mr Reeves has told an Energy Users Association of Australia-hosted seminar that in its review of the regulations determining network price and provider revenue settings, the AER has established that network costs must be reduced to help prevent further increases in electricity prices.

“While there is a fundamental need to invest in the networks to meet rising demand, replace ageing assets and maintain reliability, the AER considers that the rules need to be improved to ensure that consumers do not pay more than is necessary,” Mr Reeves said.

The AER will submit proposed rule changes to the Australian Energy Market Commission in late 2011.